Improving weather forecasts are expected to push U.S. corn futures lower at the start of trading Thursday as concerns ease about output.

Traders predict corn for December delivery, the most actively traded contract, will start down 10 cents to 12 cents a bushel at the Chicago Board of Trade. In overnight electronic trading, the contract dropped 11 3/4 cents, or 1.6%, to $7.01 1/4 a bushel.

Weighing on prices are expectations for favorable rains in key growing areas of the Midwest. The rains are welcome by farmers after excessively hot, dry weather in late July and should help give the crop a boost, forecasters said.

"More moderate rainfall and episodes of scattered showers and thunderstorms will ease stress to developing corn," said Mike Palmerino, senior agricultural meteorologist for Telvent DTN, a private weather firm.

Traders are paying close attention to the weather because farmers need favorable conditions to grow a large crop to replenish low inventories. Supplies are expected to drop to a 15-year low this year and tighten in the upcoming year due to strong global demand.

Corn futures have pulled back 13% since reaching an all-time high in early June. Yet, users of the grain remain nervous about the potential for poor weather to reduce the autumn harvest.

Cooler, wetter conditions in the Midwest are more beneficial to the corn crop than last month's intense heat. Intervals of rain will fall in the Midwest over the next five days, with some areas expected to see rain every day during that period, wrote meteorologists at Freese Notis Weather, a private forecaster.

Traders are waiting to see how private analytical firm Informa Economics judges the crop in a report expected out about 11:30 a.m. EDT Thursday. The firm is expected to release updated estimates on corn and soybean output ahead of a monthly U.S. Department of Agriculture report next week.

In other news, strength in the U.S. dollar should add pressure to prices, traders said. A firm dollar weighs on the grain markets because it makes U.S. commodities more expensive to foreign buyers.

Weekly U.S. corn export sales announced Thursday were toward the low end of traders' expectations. The USDA said total sales were 758,600 tons for the week ended July 28, compared to expectations for 600,000 tons to 1.2 million tons.